Quick reminder on Cable. Keep an eye on 1.5114 traders!

As can be seen on the 4hr chart, Cable did indeed see a decline in value during yesterday’s trade, as we reported may happen in our previous analysis (http://blog.icmarkets.com/tuesday-29th-september-daily-technical-outlook-and-review/). Candle action beautifully retested the underside of psychological resistance 1.5200 and reached lows of 1.5129 on the day. Seeing as price has yet to hit the swap support level at 1.5114, our level of interest, much of the following analysis will remain the same as the previous…

• Weekly shows price lurking around the lower limits of a weak-looking demand base at 1.5169-1.5260. With this, we believe Cable will drill a little lower to either the near-term channel support line (1.4564) or demand taken from 1.4855-1.5052 before any noteworthy correction takes place.

• As expected, the daily demand area at 1.5169-1.5260 has been tested further. There’s a strong possibility that price will continue to do so as well, at least until it connects with the aforementioned weekly channel support which converges with the lower limits of this demand area.

• Taking into account the higher timeframe structures (see above), and the likelihood of price dropping lower, the 4hr swap (support) level we mentioned above is a barrier we believe to be a perfect buy zone for (confirmed) longs. The reason being is that It merges not only with the lower limits of daily demand mentioned above at 1.5088-1.5173, but also with the aforementioned weekly channel support, thus making it a very high-probability turning point in this market.